Bitfinex reports that Bitcoin selling pressure remains excessive, but the market structure has begun to improve

Bitfinex Alpha report indicates: Bitcoin, driven by strong spot demand, once broke through the resistance level of $94,000 to $95,000, reaching an intraday high of $97,850, marking the highest level in over two months. This surge triggered a significant short squeeze, with daily short covering reaching the highest level in nearly 100 days, and the open interest also returned to normal, as leveraged longs took profits and shorts were forced to exit.

Since Bitcoin returned to its opening price for 2025 and has risen over 21% from recent lows, the market structure has improved significantly, even as the price has retraced about 6% from its peak. This breakout, even if only temporary, is still constructive, reflecting reduced leverage pressure and improved market conditions, provided that spot demand continues to exist. Bitcoin is entering a dense supply zone dominated by long-term holders (LTH), roughly between $93,000 and $110,000, where previous rebound attempts have been obstructed.

Although long-term holders remain net sellers, their selling pace has significantly slowed, with realized profits dropping from over 100,000 Bitcoins at the cycle peak to about 12,800 Bitcoins per week. This slowdown, combined with seasonal factors supporting the first quarter and a stronger order flow dynamic than previous rebounds, increases the likelihood of Bitcoin absorbing the supply above. To sustain a breakout in this area, further alleviation of selling pressure from long-term holders is needed, paving the way for a more durable rebound and potential retest of historical highs.